Rite Aid Posts $15.4-Million Loss in Quarter

Rite Aid Corp. reported a fiscal second-quarter loss of $15.4 million, including charges, and restated earlier quarterly results after an accounting review by the Securities and Exchange Commission. The drugstore operator--whose stock plummeted to a 52-week low last month after warning of an expected loss on top of earlier profit shortfalls, lower credit ratings and the resignation of its chairman and chief executive--reported a quarterly unaudited net loss of 6 cents per diluted share. The results reflect a pretax charge of $29.3 million associated with closing 57 stores. Sales rose 16% to $3.5 billion. Rite Aid also said results were restated for the year-ago second-quarter, from a loss of $88.7 million to net earnings of $4.1 million. For its fiscal first quarter, Rite Aid lowered its earnings to $44.4 million from a previously stated $81 million. Rite Aid said the SEC’s review is continuing, and the commission may identify additional adjustments. Most of the SEC scrutiny focuses on accounting policies surrounding store closings and relocations made by Rite Aid, said Steven J. Valiquette, an analyst with Warburg Dillon Read. Rite Aid has taken an aggressive approach, such as recording leases for stores it is closing as one-time charges when other companies would consider them ongoing expenses, Valiquette said. Shares of the drugstore chain closed down 31 cents at $8.63 on the New York Stock Exchange.